San Francisco and Los Angeles sued Handy.com, which provides domestic services, on Wednesday for misclassifying its janitors and assistants as independent contractors rather than employees.
“We cannot allow companies like Handy to illegally classify employees as independent contractors in order to cut costs or deprive workers of legal protection,” said San Francisco district attorney Chesa Boudin, who filed the case with the public prosecutor. George Gascón of Los Angeles County. “All Californians are harmed when companies break the law, exploit their employees and make systematic classification errors.”
Handy said the suit lacks merit. “It is based on a fundamental misunderstanding of the law and rights of Handy and the Professionals who use their service,” the company said in a statement. “Handy complies with all laws and regulations in California and elsewhere, and we will defend ourselves vigorously in court.”
Founded in 2012, the New York company has $ 110.7 million in venture capital financing, according to Crunchbase. In 2018, Handy was acquired by ANGI Homeservices, the parent company of Angie’s List and HomeAdvisor, for an undisclosed price.
The lawsuit, filed in the San Francisco Superior Court, says Handy violated AB5, California’s gig gig law that makes it harder for companies to complain that workers are hired, as well as Dynamex, a Supreme Court decision state on the same subject.
“Wrongly classifying workers as independent contractors instead of employees leaves them without crucial protections in the workplace, such as the right to a minimum wage; access to paid medical leave; disability insurance; and unemployment insurance, ”said the suit.
Boudin said Handy controls its employees, including setting fees and charging customers. “It has all the characteristics of an employer-employee agreement,” he said. “It is not a referral service for true independent contractors who set their own fees and charge fees from people they work for.”
The case seeks civil penalties, restitution for Handy workers in California and reclassifying its workers here as employees.
Handy has about 9,000 janitors and assistants in the bay area, said Boudin, as well as about 13,400 in Los Angeles and 4,900 in San Diego. “At the end of the day, we are talking about tens of thousands of people who, in our claim, were classified incorrectly,” he said.
Boudin is also suing the food delivery company DoorDash because of the employee’s misclassification on AB5, while the California attorney general’s office and San Francisco, Los Angeles and San Diego city prosecutors are suing Uber and Lyft for same question.
These cases seek penalties and restitution for the past, but they can no longer seek to reclassify workers as employees because of Proposition 22, an electoral measure passed in November that maintains application-based delivery drivers and drivers as independent contractors. Concert companies are so concerned about having to treat workers like employees that they have spent more than $ 220 million to switch to Prop. 22.
Prop. 22 applies only to car transport services and delivery companies. It does not apply to Handy, so there are no legal impediments to trying to force employees to become employees.
Handy has been the focus of several lawsuits over misclassification of employees, as well as harassment at work, even under pre-AB5 laws. Like many companies, it gets its employees to agree to arbitration, which helps it keep cases out of court.
Handy’s arbitration conventions will not prevent the government’s case against him from going to court, Boudin said.
Shannon Liss-Riordan, a Boston lawyer who sued several concert companies over worker status, has a national case against Handy that has been submitted to arbitration. She is appealing in hopes of getting a date in court.
Byron Goldstein, an Oakland lawyer, filed a class action lawsuit against Handy in 2014. It was resolved in 2017 through arbitration. Handy paid $ 1.2 million to compensate California workers, while denying any wrongdoing.
“We think it was a strong case of misclassification,” he said on Tuesday. “But arbitration agreements, in many cases, have isolated companies against the law.”
Vilma Zenelaj, a plaintiff in the Goldstein case who worked as a cleaner for Handy in Los Angeles, told The Chronicle at the time that she felt she was treated like an employee without any of the benefits of the job.
“You had to wear their t-shirt,” she said. “It is necessary to greet customers with ‘Olá, sou Vilma, from Handybook (the old name of the company); should i take my shoes off? ‘You had to ask a customer how or whether to use the bathroom. It was a very controlling situation. “
Carolyn Said is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @csaid